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Here
we will touch on things not to do and definate no no's in house
flipping. Whatever you do in the process of flipping make
educated well thought out decisions. This project is a major
investment that you are attempting to make money at. This is
also something that is going to be someone's home.
While
I encourage you to form good relationships with a realtor, I
wouldn't seek too much advice from them on what improvements to
do to a certain property. While their ideas are usually
genuine, they don't always have your bottom line in mind. They
want to sell the house. They get the same commission no
matter how much you are making. I'm not saying disregard their
suggestions, but think them through and don't make their
opinion the only reason you do a particular improvement.
Don't
overdo improvements, just because you spend more money on
something does not mean you will get more on the resale. Keep
things comparable to other houses in the neighborhood. If you
list a home for over market value, and get a buyer that wants
to pay that price, you will still be screwed if it does not
appraise at that price. The lender will either ask the buyer
to come up with the difference, ask you to lower your price or
reject the loan all together. In the mean time you may have
missed offers.
Don't
decorate in off the wall colors. Lets take an example, say a
room painted red. It may be your taste, or the color may have
been there when you got there and the walls are in perfect
shape, just painted red. Don't try to sell it to someone else.
You are gambling that someone with the same taste is going to
be shopping for a house in that price range in that
neighborhood. That someone that does have that taste isn't
going to buy the house just because the room is painted red,
they are going to buy it because of other reasons. If it isn't
red and they want that room red they can paint it back red
after they move in. This way you won't turn off all the other
buyers that have no interest in a red room. The same can be
said for very dark colors, and all the other colors that aren't
light earth tones.
If
you uncover something when doing a renovation that really needs
to be fixed like leaky plumbing, ungrounded outlets, insect
infestation, etc.. Take care of it. If you just hide it you
are just leaving something for the home inspector to find and
something that you will end up fixing later at a higher cost
along with delaying the sale. Home inspections are the right
of the buyer in almost every state and is required by some
forms of buyer financing like FHA mortgages. To not take care
of an obvious defect is just leaving a can of worms to be
opened later.
Don't
be discouraged by negative feedback from realty showings.
There are many people that have different ideas on how things
should be. If something comes up repetitively from different
realtors, then look into making an adjustment (if feasible),
otherwise leave your finished product the way it is.
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